Unum Group (NYSE:UNM) and CNO Financial Group (NYSE:CNO) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.
Valuation & Earnings
This table compares Unum Group and CNO Financial Group's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Unum Group | $12.00 billion | 0.45 | $1.10 billion | $5.43 | 4.92 |
CNO Financial Group | $4.02 billion | 0.84 | $409.40 million | $1.80 | 13.49 |
Unum Group has higher revenue and earnings than CNO Financial Group. Unum Group is trading at a lower price-to-earnings ratio than CNO Financial Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
85.0% of Unum Group shares are held by institutional investors. Comparatively, 98.1% of CNO Financial Group shares are held by institutional investors. 0.5% of Unum Group shares are held by company insiders. Comparatively, 2.0% of CNO Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current ratings and target prices for Unum Group and CNO Financial Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Unum Group | 2 | 6 | 1 | 0 | 1.89 |
CNO Financial Group | 0 | 1 | 3 | 0 | 2.75 |
Unum Group presently has a consensus target price of $25.1429, indicating a potential downside of 6.64%. CNO Financial Group has a consensus target price of $24.00, indicating a potential downside of 2.16%. Given CNO Financial Group's stronger consensus rating and higher possible upside, analysts clearly believe CNO Financial Group is more favorable than Unum Group.
Dividends
Unum Group pays an annual dividend of $1.14 per share and has a dividend yield of 4.3%. CNO Financial Group pays an annual dividend of $0.48 per share and has a dividend yield of 2.0%. Unum Group pays out 21.0% of its earnings in the form of a dividend. CNO Financial Group pays out 26.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Unum Group has raised its dividend for 1 consecutive years and CNO Financial Group has raised its dividend for 6 consecutive years. Unum Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Unum Group has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.
Profitability
This table compares Unum Group and CNO Financial Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Unum Group | 8.00% | 10.29% | 1.56% |
CNO Financial Group | 12.27% | 7.21% | 0.98% |
Summary
CNO Financial Group beats Unum Group on 9 of the 17 factors compared between the two stocks.